If you’ve used TurboTax before and it’s worked out well for you, then we think it’s a great choice! It doesn’t matter if you’re filing your taxes or adding someone else to your tax situation, TurboTax has all the bells and whistles of the highest level of software. If you’re looking for more of a “do-it-yourself” type of program, then TaxAct is a good choice. But let’s be clear about this… both companies are owned by Intuit so there’s no extra risk in using one over the other!
In this guide, we review the following: Can You File Your Taxes With Two Different Companies, how to avoid double taxation, is double taxation legal, and do i file llc and personal taxes together turbotax.
Can You File Your Taxes With Two Different Companies
If you’re like most Americans, you’ll spend some time this winter filing your taxes. But maybe you’re not sure which company to use. Should you get professional help? Or can you do it yourself? Will the IRS catch on if I use more than one company? Let’s take a look at what’s available and see if we can make your life easier next year!
Different types of tax companies provide different services.
When it comes to filing your taxes, there are several different types of companies that can help you.
Professional tax preparers can assist you with any kind of tax related questions, including income tax and property taxes. They can help determine how much you owe and what forms need to be filled out in order for your return to be approved by the IRS or state government.
Online tax software is another option for those who want to file their return themselves without having to hire a professional. These programs allow you access all year round so that you’re ready when it’s time for filing season. Some even offer free online filing so that users don’t have pay anything up front!
Free online preparation services are also available if none of these options seem right for your situation—these services may require some type registration before allowing access though (for example: completing survey questions).
It can be fairly easy to file with a professional tax preparer.
It can be fairly easy to file with a professional tax preparer. You can find one by visiting the National Society of Accountants website, which has a directory of certified public accountants in your area.
You’ll want to find an accountant who you trust and feel comfortable working with, someone who is familiar with your financial situation and knows how taxes relate to it. You should also look for someone who’s up-to-date on the latest tax laws and aware of any changes that could impact your filing this year. Finally, make sure they use modern software for their work so that everything goes smoothly when it comes time to crunch numbers and submit returns electronically.
You can use online tax software from your home computer.
- You can use online tax software from your home computer.
- Online tax software is available for free or for a small fee.
- Online tax software offers help with all the same things as professional tax preparation services.
- Online tax software offers a variety of different payment options.
In other words, if you want to file your own taxes without paying a professional, online tax-preparation services are an excellent option!
Some high-income earners prefer professional tax preparation services.
For those with high incomes and complex financial situations, it’s often a good idea to use tax preparation services instead of software. These higher-earners are more likely to have large deductions and be subject to alternative minimum tax (AMT), which requires that you pay your taxes in certain situations based on what you earn. AMT can be particularly tricky for people who own businesses or rental properties, as well as for anyone who has an unusually large amount of business expenses or capital gains from investments. The best way to ensure you’re maximizing every deduction possible is by hiring a professional tax preparer who understands these complexities and knows what information needs to be gathered before they begin filing your taxes.
The IRS offers free online filing for low-income filers.
If your income is below $66,000, you may be able to file your taxes for free through the IRS Free File program. To qualify for this program, you must not have a tax liability and be eligible to receive an EITC or ACTC (if filing jointly with a spouse). The following filers are ineligible:
- Those who had over $66,000 in adjusted gross income in 2018
- Those who had federal income tax withheld from their pay during 2018
- Volunteers serving abroad in combat zones
It’s completely legal to use more than one company to file your taxes.
Can you file your taxes with two different companies? Absolutely! There’s nothing wrong with using more than one company to file your taxes. You can file with the same company multiple times, or use two different companies each year. It’s completely legal and it’s actually a great way to save money.
Tax filers have lots of options for how to get help preparing and submitting their returns.
You have lots of options for how to get help preparing and submitting your returns. You can use online tax software from your home computer, or go with a professional tax preparer. Your choice depends on many things, including:
- How complex is your situation?
- Do you want someone else to double-check your work?
- What’s the best way for you to learn about changes in tax law that could affect you?
If you choose to do it yourself, some high-income earners prefer professional tax preparation services because these professionals are required by law to review every line item on the return before filing it with the IRS. This reduces errors and ensures accuracy. The IRS also offers free online filing for low-income filers through its Volunteer Income Tax Assistance program (VITA).
how to avoid double taxation
While death and taxes may both be certain, taxation is the only one of the two that can happen twice. If you own a business, the last thing you want is to get taxed on your income more than once. Double taxation occurs when a corporation pays taxes on its profits and then its shareholders pay personal taxes on dividends or capital gains received from the corporation. If you have questions about how to plan your taxes to avoid double taxation, consider speaking with a financial advisor.
What Is Double Taxation?
As of 2022, the federal income tax rate on corporate profits is 21%. On the flip side, the top marginal individual tax rate is 37%. That means that if a dollar is double-taxed in the U.S., the highest total rate it could see would be 58%. Therefore it should come as no surprise that double taxation presents quite a costly situation.
There are two justifications offered for taxing corporate profits twice. First, the tax on corporate profits is seen as justified because businesses organized as corporations are separate legal entities. Second, levying individual taxes on dividends is seen as necessary to keep wealthy shareholders from paying no income taxes on their gains.
The burden of double taxation is common and significant for corporations and shareholders alike. However, it’s not an inevitable outcome by any means. There are several ways business owners can avoid double taxation altogether or reduce taxes in general.
Why Double Taxation Matters
The obvious reason that people debate double taxation is that the same money is being earned once but taxed twice. However, there are two different entities – typically the business and the individual – that are earning the same money separately. Many argue that the tax structure is just because the individual is earning money from the business entity and the business entity is earning money from its customer.
So, technically, while the money is being taxed twice it is only being taxed when it is earned by a new person or entity. Without double taxation, many argue, that individuals could own large amounts of stock in corporations and live off of their dividends without ever paying taxes on what they are individually earning. Corporations can avoid double taxation by electing not to pay dividends.
Strategies for Avoiding Corporate Double Taxation
C corporations are the only business type that experience double taxation. Again, the corporation only pays taxes once itself. Double taxation occurs when dividends paid to shareholders get taxed at the shareholders’ individual rates after they’ve already been taxed at the corporate level.
One way to ensure that business profits are only taxed once is to organize the business as a “flow-through” or “pass-through” entity. When a business is organized as a pass-through entity, profits flow directly to the owner or owners. In turn, these are not taxed at the corporate level and again at the personal level. Instead, the owners will pay taxes at their personal rate, but double taxation is avoided.
Some examples of pass-through business entities that can adopt this strategy include:
Owners of C corporations who wish to reduce or avoid double taxation have several strategies they can follow, which include:
Double Taxation for International Businesses
Businesses that invest and do business internationally may also experience double taxation. This can happen when profits generated in one country are taxed there and then again by their home country.
Again, this sort of double taxation doesn’t have to happen. Many countries have signed mutual treaties and instituted tax credits to limit this sort of double taxation in the interest of stimulating international investment and trade.
How to Determine If You’ll Need to Pay Double Taxes
CEOs and members of the board of directors of a business can personally choose not to pay taxes on any dividends they receive. Instead, the business will pay its corporate tax, leaving those gains tax-free for them. In addition, you can also use the strategies above to minimize taxes or change the structure of your business altogether to ensure profits go right to ownership.
If you’re an employee of a business where you may encounter double taxes on your dividends, there are some planning steps you can take ahead of time. In general, these benefits can be earned by not selling your holdings for a specific amount of time, leaving you with a more favorable tax rate. By meeting these requirements, your holdings will garner the title of “qualified.” You can generally reach qualified status for dividends by holding them for at least 60 days of the 121-day period that starts 60 days past their specific ex-dividend date.
The rules surrounding dividend taxes can get quite complex. You may want to speak with a financial advisor or tax professional before making any final decisions.